Edgar Filing: CANON INC

Form 6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934


For the month of ….		July		……………………………………………… ,		2013



		CANON INC.
		(Translation of registrant’s name into English)

		30-2, Shimomaruko 3-Chome, Ohta-ku, Tokyo 146-8501, Japan
		(Address of principal executive offices)

[Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.


Form 20-F		X		Form 40-F

[Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.


Yes				No		X

[If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-………………..

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CANON INC.

(Registrant)


Date….	July 25, 2013	By ……/s/…… Shinichi Aoyama ………
		(Signature)*


				Shinichi Aoyama
				General Manager
				Consolidated Accounting Div.
				Canon Inc.

*Print the name and title of the signing officer under his signature.

The following materials are included.

1. CONSOLIDATED RESULTS FOR THE SECOND QUARTER AND THE FIRST HALF ENDED JUNE 30, 2013

LOGO

CONSOLIDATED RESULTS FOR THE SECOND QUARTER AND

THE FIRST HALF ENDED JUNE 30, 2013

July 24, 2013

CONSOLIDATED RESULTS FOR THE SECOND QUARTER

(Millions of yen, thousands of U.S. dollars, except per share amounts)


	Actual
	Three months ended June 30, 2013		Three months ended June 30, 2012		Change(%)			Three months ended June 30, 2013

Net sales	¥	966,880	¥	899,205		+	7.5	$	9,766,465
Operating profit		98,354		92,596		+	6.2		993,475
Income before income taxes		98,868		85,545		+	15.6		998,667
Net income attributable to Canon Inc.	¥	66,496	¥	51,714		+	28.6	$	671,677


Net income attributable to Canon Inc. stockholders per share:

- Basic	¥	57.68	¥	43.71		+	32.0	$	0.58
- Diluted		57.68		43.71		+	32.0		0.58

CONSOLIDATED RESULTS FOR THE FIRST HALF (Millions of yen, thousands of U.S. dollars, except per share amounts)
	Actual									Projected
	Six months ended June 30, 2013		Six months ended June 30, 2012		Change(%)			Six months ended June 30, 2013		Year ending December 31, 2013		Change(%)

Net sales	¥	1,783,533	¥	1,728,445		+	3.2	$	18,015,485	¥	3,850,000		+	10.6
Operating profit		153,127		175,275		-	12.6		1,546,737		380,000		+	17.3
Income before income taxes		159,123		178,269		-	10.7		1,607,303		390,000		+	13.8
Net income attributable to Canon Inc.	¥	107,409	¥	113,252		-	5.2	$	1,084,939	¥	260,000		+	15.8


Net income attributable to Canon Inc. stockholders per share:

- Basic	¥	93.17	¥	95.26		-	2.2	$	0.94	¥	225.54		+	17.9
- Diluted		93.17		95.25		-	2.2		0.94		-			-


	Actual
	As of June 30, 2013		As of December 31, 2012		Change(%)			As of June 30, 2013

Total assets	¥	4,109,526	¥	3,955,503		+	3.9	$	41,510,364


Canon Inc. stockholders’ equity	¥	2,690,371	¥	2,598,026		+	3.6	$	27,175,465


Notes:	1.	Canon’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles.
	2.	U.S. dollar amounts are translated from yen at the rate of JPY99=U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of June 28, 2013, solely for the convenience of the reader.


Canon Inc.		30-2, Shimomaruko 3-chome, Ohta-ku,
Headquarter office		Tokyo 146-8501, Japan
		Phone: +81-3-3758-2111

-1-

I. Operating Results and Financial Conditions

2013 Second Quarter in Review

Looking back at the global economy in the second quarter of 2013, in the United States, the economic recovery continued moderately ahead of other developed countries amid expanding personal spending backed by improvements in the housing market and employment conditions, while in Europe, the economy as a whole remained sluggish. In China, although the economy continued to grow, the pace of growth weakened and most of the other emerging countries also experienced low growth. The Japanese economy showed signs of recovery with an improvement in the export environment along with the effects of other stimulation measures. Although a recovery was evident in some economies, such as in the U.S., the global economy overall remained flat.

As for the markets in which Canon operates amid these conditions, demand for multifunction devices (MFDs) declined due to economic uncertainty and a deceleration in economic growth in emerging countries, while demand for laser printers decreased due to the sluggish economy. Demand for interchangeable-lens digital cameras displayed strong growth all over the world, while demand for digital compact cameras continued to shrink both in developed countries and emerging markets. Overall demand for inkjet printers also declined due to the continued weak economy. In the industry and others sector, demand for semiconductor lithography equipment saw an easing of the curb on capital expenditure for memory devices, while lithography equipment used in the production of flat panel displays (FPD) continued to face sluggish demand for large-size panels despite the healthy market for mid- and small-size panels used mainly in smartphones and tablet PCs.

The average values of the yen during the second quarter and first half of the year were ¥98.80 and ¥95.96 to the U.S. dollar, respectively, year-on-year depreciations of approximately ¥19 and ¥16, and ¥129.02 and ¥125.90 to the euro, respectively, year-on-year depreciations of approximately ¥27 and ¥22.

Due to the steady sales growth of competitive MFDs and laser printers, along with increased sales of inkjet printers and the positive effect of favorable currency exchange rates, net sales for the second quarter increased 7.5% to ¥966.9 billion (U.S.$9,766 million) from the year-ago period, while net sales for the six months ended June 30, 2013 totaled ¥1,783.5 billion (U.S.$18,015 million), a year-on-year increase of 3.2%. The gross profit ratio for the second quarter rose 0.5 points year on year to 49.4%, thanks to the effects of ongoing cost-cutting efforts along with the depreciation of the yen. The gross profit ratio for the first half of the year also increased by 0.3 points to 48.4%. Despite Group-wide efforts to thoroughly reduce spending, foreign-currency-denominated operating expenses increased after conversion into yen due to the depreciation of the yen, resulting in an increase in second-quarter operating expenses of 9.1% year on year to ¥379.0 billion (U.S.$3,828 million). Consequently, second-quarter operating profit increased by 6.2% to ¥98.4 billion (U.S.$993 million) compared with the corresponding period of the previous year. Other income increased by ¥7.6 billion (U.S.$76 million) for the second quarter from the year-ago period due to foreign currency exchange gains while income before income taxes increased by 15.6% year on year to ¥98.9 billion (U.S.$999 million). Net income attributable to Canon Inc. increased by 28.6% to ¥66.5 billion (U.S.$672 million) for the second quarter. Operating profit for the first half of the year decreased by 12.6% to ¥153.1 billion (U.S.$1,547 million) due to the large decline in the first quarter while income before income taxes decreased 10.7% year on year to ¥159.1 billion (U.S.$1,607 million) for the first six months of the year. Net income attributable to Canon Inc. decreased by 5.2% to ¥107.4 billion (U.S.$1,085 million) for the first half.

Basic net income attributable to Canon Inc. stockholders per share for the second quarter was ¥57.68 (U.S.$0.58), an increase of ¥13.97 (U.S.$0.14) compared with the corresponding quarter of the previous year, and ¥93.17 (U.S.$0.94) for the first half of 2013, a year-on-year decrease of ¥2.09 (U.S.$0.02).

-2-

Results by Segment

Looking at Canon’s quarterly performance by business unit, within the Office Business Unit, as for office MFDs, led by the enhanced imageRUNNER ADVANCE C5200/C2200 series lineups, sales of color models increased from the year-ago period. Sales of production printing systems continued to grow steadily, with the new imagePRESS C1+II contributing to healthy sales in Japan. As for high speed continuous feed printers and wide-format printers, sales of the Océ ColorStream 3000 series showed solid growth. Despite the continued shrinking of the market as a whole, laser printers recorded an increase in sales volume year on year owing to sales expansion efforts centered on laser multifunction printers. As a result, second-quarter sales for the business unit totaled ¥520.0 billion (U.S.$5,253 million), an increase of 14.6% year on year, while operating profit totaled ¥76.2 billion (U.S.$770 million) an increase of 30.7%. Sales for the combined first six months of the year totaled ¥984.2 billion (U.S.$9,942 million), increasing 10.4% year on year, while operating profit increased by 22.6% to ¥136.3 billion (U.S.$1,376 million).

Within the Imaging System Business Unit, sales of EOS 5D Mark III and 6D advanced-amateur-model interchangeable-lens digital cameras continued to grow. Furthermore, in Japan, the new entry-level EOS Digital Rebel SL1/T5i cameras have proved popular, further contributing to sales and helping the company to maintain its top share of the global market. As for digital compact cameras, sales volume declined from the previous year due to the market slowdown and the increasing popularity of smartphones, despite efforts to increase sales through the introduction of such new products as the Powershot SX280 HS, equipped with a high-magnification zoom lens that exceeds the capabilities of lenses offered by smartphones, and the ELPH 115 IS. The Cinema EOS System, which has earned high marks from professionals working in the motion-picture and television production industries, received a boost in product appeal through upgrades in related software aimed at increasing convenience for users. With regard to inkjet printers, although sales volume of hardware dipped from the year-ago period, sales for the segment enjoyed solid growth with an increase in sales of consumable supplies, even when excluding the effects of the favorable foreign exchange rate. As a result of the above, second-quarter sales for the business unit increased by 4.4% to ¥386.0 billion (U.S.$3,899 million), while operating profit totaled ¥56.3 billion (U.S.$568 million), an increase of 0.5%. Sales for the first six months totaled ¥ 684.1 billion (U.S.$6,910 million), rising 1.6% year on year, while operating profit totaled ¥84.8 billion (U.S.$856 million), a decrease of 17.5% year on year.

In the Industry and Others Business Unit, although investment in semiconductor lithography equipment used to produce image sensors grew steadily, sales volume of semiconductor lithography equipment declined from the previous year owing to restrained capital expenditure for memory devices due to the inventory correction in the NAND flash memory market. As for FPD lithography equipment, shrinking demand for equipment used in the production of large-size panels led to a sales decline for the period. Consequently, second-quarter sales for the segment totaled ¥85.9 billion (U.S.$868 million), a year-on-year decrease of 12.6%, while operating profit decreased ¥12.2 billion (U.S.$123 million), posting a loss of ¥5.8 billion (U.S.$59 million). Sales for the first half of the year totaled ¥161.0 billion (U.S.$1,626 million), a decrease of 22.6% year on year, while operating profit recorded a loss of ¥13.4 billion (U.S.$135 million), a decrease of ¥23.7 billion (U.S.$239 million), from the year-ago period.

Cash Flow

During the first half of 2013, cash flow from operating activities totaled ¥217.9 billion (U.S.$2,201 million), an increase of ¥15.9 billion (U.S.$161 million) compared with the corresponding period of the previous year owing to improvements in working capital through such means as increasing the collection of accounts receivable. Although capital investment focused on new products, cash flow from investing activities increased ¥27.5 billion (U.S.$278 million) year on year, totaling ¥139.3 billion (U.S.$1,407 million), due to the increasing amount of time deposits included in short-term investments. Accordingly, free cash flow totaled ¥78.6 billion (U.S.$794 million), a decrease of ¥11.6 billion (U.S.$117 million) compared with the corresponding year-ago period.

Cash flow from financing activities recorded an outlay of ¥85.4 billion (U.S.$862 million), mainly arising from the dividend payout. Owing to these factors, as well as the positive impact from foreign currency translation adjustments, cash and cash equivalents increased by ¥41.1 billion (U.S.$415 million) year on year to ¥707.8 billion (U.S.$7,149 million).

-3-

Outlook

As for the outlook in the third quarter onward, despite such negative factors as a protracted recession in Europe and the uncertainty of economic growth in China, the global economy is expected to achieve moderate growth buoyed by the aggressive monetary and fiscal policies driving the U.S. and Japanese economies.

In the businesses in which Canon is involved, demand for MFDs is projected to grow moderately mainly for color models fueled by the recovery of the global economy, while demand in the laser printer market is expected to surpass the previous year’s level. Demand for interchangeable-lens digital cameras is expected to continue growing owing to an expanding user base in developed countries along with market growth in emerging countries. The digital compact camera market is projected to shrink, mainly among low-end models, due to the popularity of smartphones. As for inkjet printers, while the decline in demand will taper off in the latter half of the year, for the full year it is expected to drop below that for the previous year. In the industrial equipment market, a recovery in supply-demand balance in the memory device market is expected to lead to renewed investment by device manufacturers in the second half of the year, boosting demand for semiconductor lithography equipment. Demand for FPD lithography equipment will likely pick up in line with the recovery in demand for large-size panels and increasing needs for miniaturization.

With regard to currency exchange rates for the third quarter onward, on which Canon’s performance outlook is based, taking into account such uncertainties as the direction of monetary policies in the United States and anxiety over a possible recurrence of Europe’s fiscal problems, Canon assumes exchange rates of ¥95 to the U.S. dollar and ¥125 to the euro, representing depreciations of approximately ¥16 against the U.S. dollar, and approximately ¥23 against the euro compared with the annual average rates of the previous year.

Upon taking into consideration these foreign exchange rate assumptions and the current economic forecast, Canon projects full-year consolidated net sales in 2013 of ¥3,850.0 billion (U.S.$38,889 million), a year-on-year increase of 10.6%; operating profit of ¥380.0 billion (U.S.$3,838 million), a year-on-year increase of 17.3%; income before income taxes of ¥390.0 billion (U.S.$3,939 million), a year-on-year increase of 13.8%; and net income attributable to Canon Inc. of ¥260.0 billion (U.S.$2,626 million), a year-on-year increase of 15.8%.


Fiscal year	Millions of yen
	Year ending December 31, 2013				Change		Year ended December 31, 2012		Change (%)
	Previous Outlook (A)		Revised Outlook (B)		(B - A)		Results (C)		(B - C) / C
Net sales	¥	3,980,000	¥	3,850,000	¥	(130,000)	¥	3,479,788		+10.6%
Operating profit		450,000		380,000		(70,000)		323,856		+17.3%
Income before income taxes		450,000		390,000		(60,000)		342,557		+13.8%
Net income attributable to Canon Inc.	¥	290,000	¥	260,000	¥	(30,000)	¥	224,564		+15.8%

-4-

Basic Policy Regarding Profit Distribution

Canon is being more proactive in returning profits to shareholders, mainly in the form of a dividend, taking into consideration medium-term profit forecasts along with planned future investments, cash flow and other factors.

Canon Inc. plans to distribute an interim dividend of ¥65.00 (U.S.$0.66) per share for the fiscal year 2013, half the amount of the annual dividend paid out in fiscal 2012 which included the commemorative dividend to mark the 75^th anniversary of the company’s establishment, to provide a stable return to shareholders. The year-end dividend, however, has yet to be decided.

This document contains forward-looking statements with respect to future results, performance and achievements that are subject to risk and uncertainties and reflect management’s views and assumptions formed by available information. All statements other than statements of historical fact are statements that could be considered forward-looking statements. When used in this document, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project” or “should” and similar expressions, as they relate to Canon, are intended to identify forward-looking statements. Many factors could cause the actual results, performance or achievements of Canon to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptance of new products or services by Canon’s targeted customers, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, both referenced and not referenced in this document. A detailed description of these and other risk factors is included in Canon’s annual report on Form 20-F, which is on file with the United States Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. Canon does not intend or assume any obligation to update these forward-looking statements.

-5-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

II. Financial Statements

1. CONSOLIDATED BALANCE SHEETS


	Millions of yen						Thousands of U.S. dollars
	As of June 30, 2013		As of December 31, 2012		Change		As of June 30, 2013
ASSETS
Current assets:
Cash and cash equivalents	¥	707,774	¥	666,678	¥	41,096	$	7,149,232
Short-term investments		47,349		28,322		19,027		478,273
Trade receivables, net		544,888		573,375		(28,487)		5,503,919
Inventories		582,461		551,623		30,838		5,883,444
Prepaid expenses and other current assets		291,791		262,258		29,533		2,947,385

Total current assets		2,174,263		2,082,256		92,007		21,962,253

Noncurrent receivables		20,599		19,702		897		208,071
Investments		60,741		56,617		4,124		613,545
Property, plant and equipment, net		1,284,058		1,260,364		23,694		12,970,283
Intangible assets, net		138,251		135,736		2,515		1,396,475
Other assets		431,614		400,828		30,786		4,359,737

Total assets	¥	4,109,526	¥	3,955,503	¥	154,023	$	41,510,364


LIABILITIES AND EQUITY
Current liabilities:
Short-term loans and current portion of long-term debt	¥	1,623	¥	1,866	¥	(243)	$	16,394
Trade payables		322,859		325,235		(2,376)		3,261,202
Accrued income taxes		53,634		60,057		(6,423)		541,758
Accrued expenses		274,067		291,348		(17,281)		2,768,354
Other current liabilities		235,549		165,929		69,620		2,379,282

Total current liabilities		887,732		844,435		43,297		8,966,990
Long-term debt, excluding current installments		1,641		2,117		(476)		16,576
Accrued pension and severance cost		283,845		272,131		11,714		2,867,121
Other noncurrent liabilities		88,025		82,518		5,507		889,141

Total liabilities		1,261,243		1,201,201		60,042		12,739,828


Equity:
Canon Inc. stockholders’ equity:
Common stock		174,762		174,762		-		1,765,273
Additional paid-in capital		401,003		401,547		(544)		4,050,535
Legal reserve		62,124		61,663		461		627,515
Retained earnings		3,090,303		3,138,976		(48,673)		31,215,182
Accumulated other comprehensive income (loss)		(226,173)		(367,249)		141,076		(2,284,576)
Treasury stock, at cost		(811,648)		(811,673)		25		(8,198,464)

Total Canon Inc. stockholders’ equity		2,690,371		2,598,026		92,345		27,175,465

Noncontrolling interests		157,912		156,276		1,636		1,595,071

Total equity		2,848,283		2,754,302		93,981		28,770,536

Total liabilities and equity	¥	4,109,526	¥	3,955,503	¥	154,023	$	41,510,364


	Millions of yen						Thousands of U.S. dollars
	As of June 30, 2013		As of December 31, 2012				As of June 30, 2013
Notes:

1. Allowance for doubtful receivables	¥	13,965	¥	12,970			$	141,061
2. Accumulated depreciation		2,278,548		2,159,453				23,015,636
3. Accumulated other comprehensive income (loss):
Foreign currency translation adjustments		(111,753)		(247,734)				(1,128,818)
Net unrealized gains and losses on securities		5,959		4,146				60,192
Net gains and losses on derivative instruments		(857)		(4,462)				(8,657)
Pension liability adjustments		(119,522)		(119,199)				(1,207,293)

-6-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

2. CONSOLIDATED STATEMENTS OF INCOME AND CONSOLIDATED STETEMENTS OF COMPREHENSIVE INCOME

Consolidated statements of income

Results for the second quarter

Millions of yen

Thousands of
U.S. dollars

Three months
ended
June 30, 2013

Three months
ended
June 30, 2012

Change(%)

Three months
ended
June 30, 2013

Net sales

966,880

899,205

7.5

9,766,465

Cost of sales

489,522

459,284

4,944,667

Gross profit

477,358

439,921

8.5

4,821,798

Operating expenses:

Selling, general and administrative expenses

301,359

270,003

3,044,030

Research and development expenses

77,645

77,322

784,293

379,004

347,325

3,828,323

Operating profit

98,354

92,596

6.2

993,475

Other income (deductions):

Interest and dividend income

1,705

2,012

17,222

Interest expense

(146)

(266)

(1,475)

Other, net

(1,045)

(8,797)

(10,555)

514

(7,051)

5,192

Income before income taxes

98,868

85,545

15.6

998,667

Income taxes

30,242

32,389

305,475

Consolidated net income

68,626

53,156

693,192

Less: Net income attributable to noncontrolling interests

2,130

1,442

21,515

Net income attributable to Canon Inc.

66,496

51,714

28.6

671,677

Results for the first half

Millions of yen

Thousands of
U.S. dollars

Six months
ended
June 30, 2013

Six months
ended
June 30, 2012

Change(%)

Six months
ended
June 30, 2013

Net sales

1,783,533

1,728,445

3.2

18,015,485

Cost of sales

920,262

897,626

9,295,576

Gross profit

863,271

830,819

3.9

8,719,909

Operating expenses:

Selling, general and administrative expenses

558,983

506,191

5,646,293

Research and development expenses

151,161

149,353

1,526,879

710,144

655,544

7,173,172

Operating profit

153,127

175,275

12.6

1,546,737

Other income (deductions):

Interest and dividend income

2,741

3,574

27,687

Interest expense

(251)

(375)

(2,535)

Other, net

3,506

(205)

35,414

5,996

2,994

60,566

Income before income taxes

159,123

178,269

10.7

1,607,303

Income taxes

48,770

61,503

492,626

Consolidated net income

110,353

116,766

1,114,677

Less: Net income attributable to noncontrolling interests

2,944

3,514

29,738

Net income attributable to Canon Inc.

107,409

113,252

5.2

1,084,939

-7-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

Consolidated statements of comprehensive income

Results for the second quarter

Millions of yen

Thousands of
U.S. dollars

Three months
ended
June 30, 2013

Three months
ended
June 30, 2012

Change(%)

Three months
ended
June 30, 2013

Consolidated net income

68,626

53,156

29.1

693,192

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments

51,534

(61,992)

520,545

Net unrealized gains and losses on securities

1,029

(3,008)

10,394

Net gains and losses on derivative instruments

2,672

5,272

26,990

Pension liability adjustments

935

251

9,445

56,170

(59,477)

567,374

Comprehensive income (loss)

124,796

(6,321)

1,260,566

Less: Comprehensive income attributable to noncontrolling interests

2,769

620

27,970

Comprehensive income (loss) attributable to Canon Inc.

122,027

(6,941)

1,232,596

Results for the first half

Millions of yen

Thousands of
U.S. dollars

Six months
ended
June 30, 2013

Six months
ended
June 30, 2012

Change(%)

Six months
ended
June 30, 2013

Consolidated net income

110,353

116,766

5.5

1,114,677

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments

137,134

8,366

1,385,192

Net unrealized gains and losses on securities

2,155

989

21,768

Net gains and losses on derivative instruments

3,607

897

36,434

Pension liability adjustments

(81)

588

(818)

142,815

10,840

1,442,576

Comprehensive income

253,168

127,606

98.4

2,557,253

Less: Comprehensive income attributable to noncontrolling interests

4,397

3,536

44,415

Comprehensive income attributable to Canon Inc.

248,771

124,070

100.5

2,512,838

-8-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

3. DETAILS OF SALES


Results for the second quarter	Millions of yen							Thousands of U.S. dollars
Sales by business unit	Three months ended June 30, 2013		Three months ended June 30, 2012		Change(%)			Three months ended June 30, 2013
Office	¥	520,032	¥	453,862		+	14.6	$	5,252,848
Imaging System		386,013		369,734		+	4.4		3,899,121
Industry and Others		85,948		98,348		-	12.6		868,162
Eliminations		(25,113)		(22,739)			-		(253,666)

Total	¥	966,880	¥	899,205		+	7.5	$	9,766,465


	Millions of yen							Thousands of U.S. dollars
Sales by region	Three months ended June 30, 2013		Three months ended June 30, 2012		Change(%)			Three months ended June 30, 2013
Japan	¥	175,654	¥	178,849		-	1.8	$	1,774,283
Overseas:
Americas		282,082		243,180		+	16.0		2,849,313
Europe		295,944		258,936		+	14.3		2,989,333
Asia and Oceania		213,200		218,240		-	2.3		2,153,536

		791,226		720,356		+	9.8		7,992,182

Total	¥	966,880	¥	899,205		+	7.5	$	9,766,465


Results for the first half	Millions of yen							Thousands of U.S. dollars
Sales by business unit	Six months ended June 30, 2013		Six months ended June 30, 2012		Change(%)			Six months ended June 30, 2013
Office	¥	984,238	¥	891,901		+	10.4	$	9,941,798
Imaging System		684,120		673,210		+	1.6		6,910,303
Industry and Others		161,015		208,130		-	22.6		1,626,414
Eliminations		(45,840)		(44,796)			-		(463,030)

Total	¥	1,783,533	¥	1,728,445		+	3.2	$	18,015,485


	Millions of yen							Thousands of U.S. dollars
Sales by region	Six months ended June 30, 2013		Six months ended June 30, 2012		Change(%)			Six months ended June 30, 2013
Japan	¥	335,372	¥	355,724		-	5.7	$	3,387,596
Overseas:
Americas		514,084		453,528		+	13.4		5,192,768
Europe		542,309		503,389		+	7.7		5,477,869
Asia and Oceania		391,768		415,804		-	5.8		3,957,252

		1,448,161		1,372,721		+	5.5		14,627,889

Total	¥	1,783,533	¥	1,728,445		+	3.2	$	18,015,485

Notes: 1. The primary products included in each of the segments are as follows:


Office Business Unit:
Office multifunction devices (MFDs) / Laser multifunction printers (MFPs) / Laser printers / Digital production printing systems / High speed continuous feed printers / Wide-format printers / Document solution


Imaging System Business Unit:
Interchangeable lens digital cameras / Digital compact cameras / Digital camcorders / Digital cinema cameras / Interchangeable lenses Inkjet printers / Large-format inkjet printers / Commercial photo printers / Image scanners / Multimedia projectors / Broadcast equipment / Calculators


Industry and Others Business Unit:
Semiconductor lithography equipment / Flat panel display (FPD) lithography equipment / Digital radiography systems / Ophthalmic equipment / Vacuum thin-film deposition equipment / Organic LED (OLED) panel manufacturing equipment / Die bonders / Micromotors /Network cameras / Handy terminals / Document scanners

2. The principal countries and regions included in each regional category are as follows:


Americas: United States of America, Canada, Latin America


Europe: United Kingdom, Germany, France, Netherlands, European countries, Middle East and Africa


Asia and Oceania: China, Asian countries, Australia

-9-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

4. CONSOLIDATED STATEMENTS OF CASH FLOWS

Millions of yen

Thousands of
U.S. dollars

Six months
ended
June 30, 2013

Six months
ended
June 30, 2012

Six months
ended
June 30, 2013

Cash flows from operating activities:

Consolidated net income

110,353

116,766

1,114,677

Adjustments to reconcile consolidated net income to net cash provided

by operating activities:

Depreciation and amortization

131,653

120,906

1,329,828

Loss on disposal of fixed assets

4,386

7,380

44,303

Deferred income taxes

(339)

(1,428)

(3,424)

Decrease in trade receivables

71,357

32,233

720,778

(Increase) decrease in inventories

18,269

(63,586)

184,535

Decrease in trade payables

(55,633)

(1,273)

(561,949)

Increase (decrease) in accrued income taxes

(7,416)

17,231

(74,909)

Decrease in accrued expenses

(38,616)

(36,987)

(390,061)

Increase (decrease) in accrued (prepaid) pension and severance cost

(874)

1,763

(8,828)

Other, net

(15,251)

8,962

(154,051)

Net cash provided by operating activities

217,889

201,967

2,200,899

Cash flows from investing activities:

Purchases of fixed assets

(119,809)

(162,481)

(1,210,192)

Proceeds from sale of fixed assets

1,062

1,287

10,727

Purchases of available-for-sale securities

(2,654)

(152)

(26,808)

Proceeds from sale and maturity of available-for-sale securities

3,141

189

31,727

(Increase) decrease in time deposits, net

(15,745)

49,998

(159,040)

Acquisitions of subsidiaries, net of cash acquired

(4,914)

(704)

(49,636)

Purchases of other investments

(209)

(259)

(2,111)

Other, net

(138)

345

(1,394)

Net cash used in investing activities

(139,266)

(111,777)

(1,406,727)

Cash flows from financing activities:

Proceeds from issuance of long-term debt

1,101

389

11,121

Repayments of long-term debt

(1,345)

(1,181)

(13,586)

Decrease in short-term loans, net

(563)

(3,616)

(5,687)

Dividends paid

(80,695)

(72,092)

(815,101)

Repurchases of treasury stock, net

(99,970)

131

Other, net

(3,865)

(11,071)

(39,040)

Net cash used in financing activities

(85,354)

(187,541)

(862,162)

Effect of exchange rate changes on cash and cash equivalents

47,827

(1,829)

483,101

Net change in cash and cash equivalents

41,096

(99,180)

415,111

Cash and cash equivalents at beginning of period

666,678

773,227

6,734,121

Cash and cash equivalents at end of period

707,774

674,047

7,149,232

-10-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

5. NOTE FOR GOING CONCERN ASSUMPTION

Not applicable.

6. SEGMENT INFORMATION

(1) SEGMENT INFORMATION BY BUSINESS UNIT


Results for the second quarter		Millions of yen						Thousands of U.S. dollars
		Three months ended June 30, 2013		Three months ended June 30, 2012		Change(%)		Three months ended June 30, 2013
Office
Net sales:
	External customers	¥	517,455	¥	452,682	+	14.3	$	5,226,818
	Intersegment		2,577		1,180	+	118.4		26,030

	Total		520,032		453,862	+	14.6		5,252,848

Operating cost and expenses			443,840		395,550	+	12.2		4,483,232

Operating profit		¥	76,192	¥	58,312	+	30.7	$	769,616


Imaging System
Net sales:
	External customers	¥	385,833	¥	369,297	+	4.5	$	3,897,303
	Intersegment		180		437	-	58.8		1,818

	Total		386,013		369,734	+	4.4		3,899,121

Operating cost and expenses			329,735		313,721	+	5.1		3,330,656

Operating profit		¥	56,278	¥	56,013	+	0.5	$	568,465


Industry and Others
Net sales:
	External customers	¥	63,592	¥	77,226	-	17.7	$	642,344
	Intersegment		22,356		21,122	+	5.8		225,818

	Total		85,948		98,348	-	12.6		868,162

Operating cost and expenses			91,778		92,016	-	0.3		927,051

Operating profit (loss)		¥	(5,830)	¥	6,332		-	$	(58,889)


Corporate and Eliminations
Net sales:
	External customers	¥	-	¥	-		-	$	-
	Intersegment		(25,113)		(22,739)		-		(253,666)

	Total		(25,113)		(22,739)		-		(253,666)

Operating cost and expenses			3,173		5,322		-		32,051

Operating profit		¥	(28,286)	¥	(28,061)		-	$	(285,717)


Consolidated
Net sales:
	External customers	¥	966,880	¥	899,205	+	7.5	$	9,766,465
	Intersegment		-		-		-		-

	Total		966,880		899,205	+	7.5		9,766,465

Operating cost and expenses			868,526		806,609	+	7.7		8,772,990

Operating profit		¥	98,354	¥	92,596	+	6.2	$	993,475

-11-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED


Results for the first half		Millions of yen						Thousands of U.S. dollars
		Six months ended June 30, 2013		Six months ended June 30, 2012		Change(%)		Six months ended June 30, 2013
Office
Net sales:
	External customers	¥	979,585	¥	889,608	+	10.1	$	9,894,798
	Intersegment		4,653		2,293	+	102.9		47,000

	Total		984,238		891,901	+	10.4		9,941,798

Operating cost and expenses			847,975		780,743	+	8.6		8,565,404

Operating profit		¥	136,263	¥	111,158	+	22.6	$	1,376,394


Imaging System
Net sales:
	External customers	¥	683,760	¥	672,314	+	1.7	$	6,906,667
	Intersegment		360		896	-	59.8		3,636

	Total		684,120		673,210	+	1.6		6,910,303

Operating cost and expenses			599,361		570,463	+	5.1		6,054,151

Operating profit		¥	84,759	¥	102,747	-	17.5	$	856,152


Industry and Others
Net sales:
	External customers	¥	120,188	¥	166,523	-	27.8	$	1,214,020
	Intersegment		40,827		41,607	-	1.9		412,394

	Total		161,015		208,130	-	22.6		1,626,414

Operating cost and expenses			174,381		197,805	-	11.8		1,761,424

Operating profit (loss)		¥	(13,366)	¥	10,325		-	$	(135,010)


Corporate and Eliminations
Net sales:
	External customers	¥	-	¥	-		-	$	-
	Intersegment		(45,840)		(44,796)		-		(463,030)

	Total		(45,840)		(44,796)		-		(463,030)

Operating cost and expenses			8,689		4,159		-		87,769

Operating profit		¥	(54,529)	¥	(48,955)		-	$	(550,799)


Consolidated
Net sales:
	External customers	¥	1,783,533	¥	1,728,445	+	3.2	$	18,015,485
	Intersegment		-		-		-		-

	Total		1,783,533		1,728,445	+	3.2		18,015,485

Operating cost and expenses			1,630,406		1,553,170	+	5.0		16,468,748

Operating profit		¥	153,127	¥	175,275	-	12.6	$	1,546,737

-12-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

(2) SEGMENT INFORMATION BY GEOGRAPHIC AREA


Results for the second quarter		Millions of yen						Thousands of U.S. dollars
		Three months ended June 30, 2013		Three months ended June 30, 2012		Change(%)		Three months ended June 30, 2013
Japan
Net sales:
	External customers	¥	187,085	¥	204,579		- 8.6	$	1,889,747
	Intersegment		473,150		474,836		- 0.4		4,779,293

	Total		660,235		679,415		- 2.8		6,669,040

Operating cost and expenses			563,567		578,793		- 2.6		5,692,596

Operating profit		¥	96,668	¥	100,622		- 3.9	$	976,444


Americas
Net sales:
	External customers	¥	281,609	¥	241,097		+ 16.8	$	2,844,535
	Intersegment		4,067		6,871		- 40.8		41,081

	Total		285,676		247,968		+ 15.2		2,885,616

Operating cost and expenses			277,724		243,642		+ 14.0		2,805,293

Operating profit		¥	7,952	¥	4,326		+ 83.8	$	80,323


Europe
Net sales:
	External customers	¥	296,132	¥	258,445		+ 14.6	$	2,991,232
	Intersegment		14,370		1,527		+ 841.1		145,152

	Total		310,502		259,972		+ 19.4		3,136,384

Operating cost and expenses			311,449		254,182		+ 22.5		3,145,950

Operating profit (loss)		¥	(947)	¥	5,790		-	$	(9,566)


Asia and Oceania
Net sales:
	External customers	¥	202,054	¥	195,084		+ 3.6	$	2,040,951
	Intersegment		227,645		209,021		+ 8.9		2,299,443

	Total		429,699		404,105		+ 6.3		4,340,394

Operating cost and expenses			414,334		392,890		+ 5.5		4,185,192

Operating profit		¥	15,365	¥	11,215		+ 37.0	$	155,202


Corporate and Eliminations
Net sales:
	External customers	¥	-	¥	-		-	$	-
	Intersegment		(719,232)		(692,255)		-		(7,264,969)

	Total		(719,232)		(692,255)		-		(7,264,969)

Operating cost and expenses			(698,548)		(662,898)		-		(7,056,041)

Operating profit		¥	(20,684)	¥	(29,357)		-	$	(208,928)


Consolidated
Net sales:
	External customers	¥	966,880	¥	899,205		+ 7.5	$	9,766,465
	Intersegment		-		-		-		-

	Total		966,880		899,205		+ 7.5		9,766,465

Operating cost and expenses			868,526		806,609		+ 7.7		8,772,990

Operating profit		¥	98,354	¥	92,596		+ 6.2	$	993,475

-13-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED


Results for the first half		Millions of yen						Thousands of U.S. dollars
		Six months ended June 30, 2013		Six months ended June 30, 2012		Change(%)		Six months ended June 30, 2013
Japan
Net sales:
	External customers	¥	358,959	¥	413,794		- 13.3	$	3,625,848
	Intersegment		898,876		935,009		- 3.9		9,079,556

	Total		1,257,835		1,348,803		- 6.7		12,705,404

Operating cost and expenses			1,097,394		1,175,625		- 6.7		11,084,788

Operating profit		¥	160,441	¥	173,178		- 7.4	$	1,620,616


Americas
Net sales:
	External customers	¥	510,984	¥	448,099		+ 14.0	$	5,161,455
	Intersegment		6,645		12,089		- 45.0		67,121

	Total		517,629		460,188		+ 12.5		5,228,576

Operating cost and expenses			506,351		451,630		+ 12.1		5,114,657

Operating profit		¥	11,278	¥	8,558		+ 31.8	$	113,919


Europe
Net sales:
	External customers	¥	542,861	¥	502,481		+ 8.0	$	5,483,444
	Intersegment		26,101		3,053		+ 754.9		263,647

	Total		568,962		505,534		+ 12.5		5,747,091

Operating cost and expenses			575,923		488,851		+ 17.8		5,817,404

Operating profit (loss)		¥	(6,961)	¥	16,683		-	$	(70,313)


Asia and Oceania
Net sales:
	External customers	¥	370,729	¥	364,071		+ 1.8	$	3,744,738
	Intersegment		418,173		406,227		+ 2.9		4,223,969

	Total		788,902		770,298		+ 2.4		7,968,707

Operating cost and expenses			759,348		738,234		+ 2.9		7,670,182

Operating profit		¥	29,554	¥	32,064		- 7.8	$	298,525


Corporate and Eliminations
Net sales:
	External customers	¥	-	¥	-		-	$	-
	Intersegment		(1,349,795)		(1,356,378)		-		(13,634,293)

	Total		(1,349,795)		(1,356,378)		-		(13,634,293)

Operating cost and expenses			(1,308,610)		(1,301,170)		-		(13,218,283)

Operating profit		¥	(41,185)	¥	(55,208)		-	$	(416,010)


Consolidated
Net sales:
	External customers	¥	1,783,533	¥	1,728,445		+ 3.2	$	18,015,485
	Intersegment		-		-		-		-

	Total		1,783,533		1,728,445		+ 3.2		18,015,485

Operating cost and expenses			1,630,406		1,553,170		+ 5.0		16,468,748

Operating profit		¥	153,127	¥	175,275		- 12.6	$	1,546,737

-14-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

7. SIGNIFICANT CHANGES IN CANON INC. STOCKHOLDERS’ EQUITY

None.

8. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

(1) GROUP POSITION

Number of Group Companies


	June 30, 2013		December 31, 2012		Change
Subsidiaries		271		275		(4	)
Affiliates		9		9		-
Total		280		284		(4	)

Change in Group Entities


Subsidiaries
Addition:		16 companies
Removal:		20 companies

Subsidiaries Listed on Domestic Stock Exchange

Tokyo Stock Exchange (1st section): Canon Marketing Japan Inc., Canon Electronics Inc.

(2) SIGNIFICANT ACCOUNTING POLICIES

Canon’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles.

-15-

Canon Inc.

July 24, 2013

CONSOLIDATED FINANCIAL RESULTS FOR THE SECOND QUARTER

AND THE FIRST HALF ENDED JUNE 30, 2013

SUPPLEMENTARY REPORT

TABLE OF CONTENTS


		PAGE
1.	SALES BY GEOGRAPHIC AREA AND BUSINESS UNIT		S 1
2.	SEGMENT INFORMATION BY BUSINESS UNIT		S 2
3.	OTHER INCOME / DEDUCTIONS		S 2
4.	BREAKDOWN OF PRODUCT SALES WITHIN BUSINESS UNIT		S 3
5.	SALES GROWTH IN LOCAL CURRENCY (Year over year)		S 3
6.	PROFITABILITY		S 4
7.	IMPACT OF FOREIGN EXCHANGE RATES		S 4
8.	STATEMENTS OF CASH FLOWS		S 4
9.	R&D EXPENDITURE		S 5
10.	INCREASE IN PP&E & DEPRECIATION AND AMORTIZATION		S 5
11.	INVENTORIES		S 5
12.	DEBT RATIO		S 5
13.	OVERSEAS PRODUCTION RATIO		S 5
14.	NUMBER OF EMPLOYEES		S 5

Canon Inc.


1. SALES BY GEOGRAPHIC AREA AND BUSINESS UNIT			(Millions of yen	)


		2013									2012									Change year over year
		2nd quarter			1st half			Year (P)			2nd quarter			1st half			Year			2nd quarter		1st half		Year
Japan
	Office		95,105			185,639			-			95,062			187,593			368,939			+0.0%		-1.0%		-
	Imaging System		47,590			87,684			-			50,036			92,384			213,465			-4.9%		-5.1%		-
	Industry and Others		32,959			62,049			-			33,751			75,747			137,882			-2.3%		-18.1%		-
	Total		175,654			335,372			727,900			178,849			355,724			720,286			-1.8%		-5.7%		+1.1%
Overseas
	Office		422,350			793,946			-			357,620			702,015			1,383,021			+18.1%		+13.1%		-
	Imaging System		338,243			596,076			-			319,261			579,930			1,190,929			+5.9%		+2.8%		-
	Industry and Others		30,633			58,139			-			43,475			90,776			185,552			-29.5%		-36.0%		-
	Total		791,226			1,448,161			3,122,100			720,356			1,372,721			2,759,502			+9.8%		+5.5%		+13.1%
	Americas
	Office		163,280			306,263			-			138,992			264,713			530,382			+17.5%		+15.7%		-
	Imaging System		109,143			188,617			-			93,729			167,266			366,888			+16.4%		+12.8%		-
	Industry and Others		9,659			19,204			-			10,459			21,549			42,603			-7.6%		-10.9%		-
	Total		282,082			514,084			1,090,900			243,180			453,528			939,873			+16.0%		+13.4%		+16.1%
	Europe
	Office		178,318			342,127			-			149,489			301,070			597,341			+19.3%		+13.6%		-
	Imaging System		111,750			189,320			-			104,143			191,601			394,612			+7.3%		-1.2%		-
	Industry and Others		5,876			10,862			-			5,304			10,718			22,085			+10.8%		+1.3%		-
	Total		295,944			542,309			1,149,000			258,936			503,389			1,014,038			+14.3%		+7.7%		+13.3%
	Asia and Oceania
	Office		80,752			145,556			-			69,139			136,232			255,298			+16.8%		+6.8%		-
	Imaging System		117,350			218,139			-			121,389			221,063			429,429			-3.3%		-1.3%		-
	Industry and Others		15,098			28,073			-			27,712			58,509			120,864			-45.5%		-52.0%		-
	Total		213,200			391,768			882,200			218,240			415,804			805,591			-2.3%		-5.8%		+9.5%
Intersegment
	Office		2,577			4,653			-			1,180			2,293			5,615			+118.4%		+102.9%		-
	Imaging System		180			360			-			437			896			1,577			-58.8%		-59.8%		-
	Industry and Others		22,356			40,827			-			21,122			41,607			84,406			+5.8%		-1.9%		-
	Eliminations		(25,113	)		(45,840	)		-			(22,739	)		(44,796	)		(91,598	)		-		-		-
	Total		0			0			0			0			0			0			-		-		-
Total
	Office		520,032			984,238			2,019,600			453,862			891,901			1,757,575			+14.6%		+10.4%		+14.9%
	Imaging System		386,013			684,120			1,537,300			369,734			673,210			1,405,971			+4.4%		+1.6%		+9.3%
	Industry and Others		85,948			161,015			397,800			98,348			208,130			407,840			-12.6%		-22.6%		-2.5%
	Eliminations		(25,113	)		(45,840	)		(104,700	)		(22,739	)		(44,796	)		(91,598	)		-		-		-
	Total		966,880			1,783,533			3,850,000			899,205			1,728,445			3,479,788			+7.5%		+3.2%		+10.6%

(P)=Projection

- S1 -

Canon Inc.

2. SEGMENT INFORMATION BY BUSINESS UNIT

(Millions of yen)


		2013									2012									Change year over year
		2nd quarter			1st half			Year (P)			2nd quarter			1st half			Year			2nd quarter			1st half			Year
Office
	External customers		517,455			979,585			2,009,200			452,682			889,608			1,751,960			+14.3%			+10.1%		+14.7%
	Intersegment		2,577			4,653			10,400			1,180			2,293			5,615			+118.4%			+102.9%		+85.2%
	Total sales		520,032			984,238			2,019,600			453,862			891,901			1,757,575			+14.6%			+10.4%		+14.9%
	Operating profit		76,192			136,263			263,500			58,312			111,158			203,578			+30.7%			+22.6%		+29.4%
	% of sales		14.7%			13.8%			13.0%			12.8%			12.5%			11.6%			-			-		-
Imaging System
	External customers		385,833			683,760			1,535,700			369,297			672,314			1,404,394			+4.5%			+1.7%		+9.3%
	Intersegment		180			360			1,600			437			896			1,577			-58.8%			-59.8%		+1.5%
	Total sales		386,013			684,120			1,537,300			369,734			673,210			1,405,971			+4.4%			+1.6%		+9.3%
	Operating profit		56,278			84,759			254,400			56,013			102,747			210,318			+0.5%			-17.5%		+21.0%
	% of sales		14.6%			12.4%			16.5%			15.1%			15.3%			15.0%			-			-		-
Industry and Others
	External customers		63,592			120,188			305,100			77,226			166,523			323,434			-17.7%			-27.8%		-5.7%
	Intersegment		22,356			40,827			92,700			21,122			41,607			84,406			+5.8%			-1.9%		+9.8%
	Total sales		85,948			161,015			397,800			98,348			208,130			407,840			-12.6%			-22.6%		-2.5%
	Operating profit		(5,830	)		(13,366	)		(22,300	)		6,332			10,325			5,910			-			-		-
	% of sales		-6.8%			-8.3%			-5.6%			6.4%			5.0%			1.4%			-			-		-
Corporate and Eliminations
	External customers		-			-			-			-			-			-			-			-		-
	Intersegment		(25,113	)		(45,840	)		(104,700	)		(22,739	)		(44,796	)		(91,598	)		-			-		-
	Total sales		(25,113	)		(45,840	)		(104,700	)		(22,739	)		(44,796	)		(91,598	)		-			-		-
	Operating profit		(28,286	)		(54,529	)		(115,600	)		(28,061	)		(48,955	)		(95,950	)		-			-		-
Consolidated
	External customers		966,880			1,783,533			3,850,000			899,205			1,728,445			3,479,788			+7.5%			+3.2%		+10.6%
	Intersegment		-			-			-			-			-			-			-			-		-
	Total sales		966,880			1,783,533			3,850,000			899,205			1,728,445			3,479,788			+7.5%			+3.2%		+10.6%
	Operating profit		98,354			153,127			380,000			92,596			175,275			323,856			+6.2%			-12.6%		+17.3%
	% of sales		10.2%			8.6%			9.9%			10.3%			10.1%			9.3%			-			-		-
																					(P)=Projection

3. OTHER INCOME / DEDUCTIONS																					(Millions of yen)
		2013									2012									Change year over year
		2nd quarter			1st half			Year (P)			2nd quarter			1st half			Year			2nd quarter			1st half			Year
	Interest and dividend, net		1,559			2,490			4,600			1,746			3,199			5,770			(187	)		(709	)	(1,170)
	Forex gain (loss)		(5,326	)		(2,144	)		(8,600	)		(12,640	)		(3,333	)		9,130			+7,314			+1,189		(17,730)
	Equity earnings (loss) of affiliated companies		211			125			300			(38	)		427			610			+249			(302	)	(310)
	Other, net		4,070			5,525			13,700			3,881			2,701			3,191			+189			+2,824		+10,509
	Total		514			5,996			10,000			(7,051	)		2,994			18,701			+7,565			+3,002		(8,701)
																					(P)=Projection

- S2 -

Canon Inc.


4. BREAKDOWN OF PRODUCT SALES WITHIN BUSINESS UNIT
		2013			2012
		2nd quarter	1st half	Year (P)	2nd quarter	1st half	Year
Office
	Monochrome copiers	15%	16%	16%	16%	16%	16%
	Color copiers	20%	19%	19%	19%	19%	19%
	Printers	43%	43%	42%	44%	44%	44%
	Others	22%	22%	23%	21%	21%	21%
Imaging System
	Cameras	70%	68%	69%	73%	72%	70%
	Inkjet printers	23%	24%	24%	20%	21%	22%
	Others	7%	8%	7%	7%	7%	8%
Industry and Others
	Lithography equipment	13%	11%	17%	22%	20%	15%
	Others	87%	89%	83%	78%	80%	85%
							(P)=Projection

5. SALES GROWTH IN LOCAL CURRENCY (Year over year)
		2013
		2nd quarter	1st half	Year (P)
Office
	Japan	+0.0%	-1.0%	-
	Overseas	-4.8%	-6.2%	-
	Total	-3.5%	-4.8%	-0.7%
Imaging System
	Japan	-4.9%	-5.1%	-
	Overseas	-14.6%	-14.9%	-
	Total	-13.4%	-13.6%	-6.5%
Industry and Others
	Japan	-2.3%	-18.1%	-
	Overseas	-38.0%	-42.6%	-
	Total	-16.4%	-25.5%	-5.9%
Total
	Japan	-1.8%	-5.7%	+1.1%
	Overseas	-11.2%	-12.3%	-5.4%
	Americas	-6.2%	-5.8%	-2.8%
	Europe	-8.7%	-11.2%	-7.0%
	Asia and Oceania	-19.6%	-20.6%	-6.2%
	Total	-9.3%	-10.9%	-4.0%
				(P)=Projection

- S3 -

Canon Inc.

6. PROFITABILITY


		2013						2012
		1st half			Year (P)			1st half			Year
ROE *1			8.1%			9.7%			9.0%			8.7%
ROA *2			5.3%			6.4%			5.8%			5.7%
												(P)=Projection
1 Return on Equity; Based on Net Income attributable to Canon Inc. and Total Canon Inc. Stockholders’ Equity 2 Return on Assets; Based on Net Income attributable to Canon Inc. 7. IMPACT OF FOREIGN EXCHANGE RATES
(1) Exchange rates															(Yen	)
		2013									2012
		1st half			2nd half (P)			Year (P)			1st half			Year
	Yen/US$		95.96			95.00			95.46			79.92			79.96
	Yen/Euro		125.90			125.00			125.42			103.41			102.80
															(P)=Projection

(2) Impact of foreign exchange rates on sales (Year over year)					(Billions of yen)
		2013
		1st half			Year (P)
	US$		+119.1			+223.4
	Euro		+78.3			+164.1
	Other currencies		+28.3			+79.3
	Total		+225.7			+466.8
			(P)=Projection

(3) Impact of foreign exchange rates per yen		(Billions of yen)
		2013
		2nd half (P)
On sales
	US$		9.6
	Euro		4.2
On operating profit
	US$		3.5
	Euro		2.3
			(P)=Projection

8. STATEMENTS OF CASH FLOWS									(Millions of yen)
		2013						2012
		1st half			Year (P)			1st half			Year
Net cash provided by operating activities			217,889			485,000			201,967			384,077
Net cash used in investing activities			(139,266	)		(335,000	)		(111,777	)		(212,740	)
Free cash flow			78,623			150,000			90,190			171,337
Net cash used in financing activities			(85,354	)		(160,000	)		(187,541	)		(319,739	)
Effect of exchange rate changes on cash and cash equivalents			47,827			33,300			(1,829	)		41,853
Net change in cash and cash equivalents			41,096			23,300			(99,180	)		(106,549	)
Cash and cash equivalents at end of period			707,774			690,000			674,047			666,678
												(P)=Projection

- S4 -

Canon Inc.


9. R&D EXPENDITURE									(Millions of yen)
		2013				2012
		1st half		Year (P)		1st half			Year
	Office		51,510		-		49,010			99,484
	Imaging System		41,586		-		43,241			83,948
	Industry and Others		12,149		-		12,751			25,635
	Corporate and Eliminations		45,916		-		44,351			87,397
	Total		151,161		310,000		149,353			296,464
	% of sales		8.5%		8.1%		8.6%			8.5%
										(P)=Projection

10. INCREASE IN PP&E & DEPRECIATION AND AMORTIZATION									(Millions of yen)
		2013				2012
		1st half		Year (P)		1st half			Year
	Increase in PP&E		95,808		240,000		144,609			270,457
	Depreciation and amortization		131,653		260,000		120,906			258,133
										(P)=Projection

11. INVENTORIES
(1) Inventories						(Millions of yen)
		2013		2012		Difference
		Jun.30		Dec.31		Difference
	Office		220,148		201,661		+18,487
	Imaging System		236,116		245,973		(9,857	)
	Industry and Others		126,197		103,989		+22,208
	Total		582,461		551,623		+30,838

(2) Inventories/Sales*						(Days)
		2013		2012		Difference
		Jun.30		Dec.31		Difference
	Office		41		43		(2	)
	Imaging System		63		61		+2
	Industry and Others		200		124		+76
	Total		60		57		+3
*Index based on the previous six months sales.

12. DEBT RATIO
		2013		2012		Difference
		Jun.30		Dec.31		Difference
	Total debt / Total assets		0.1%		0.1%		0.0%

13. OVERSEAS PRODUCTION RATIO
		2013		2012
		1st half		Year
	Overseas production ratio		59%		52%

14. NUMBER OF EMPLOYEES
		2013		2012		Difference
		Jun.30		Dec.31		Difference
	Japan		70,548		70,234		+314
	Overseas		127,963		126,734		+1,229
	Total		198,511		196,968		+1,543

- S5 -